An Iowa company and 4 of its high-level managers have been sentenced in federal courtroom after regulation enforcement uncovered a wide-ranging scheme to defraud that victimized livestock producers all through the Midwest, prompted over $3 million in loss, and spanned practically twenty years.
Lynch Household Firms, Inc., of Waucoma, Iowa, often known as “Lynch Livestock,” pled responsible on July 29, 2022, to at least one depend of Failing to Adjust to an Order of the Secretary of Agriculture. On February 10, 2023, Lynch Livestock was sentenced to 5 years of probation, fined $196,000, and ordered to pay over $3 million in restitution to livestock producers and farmers.
Billie Joe Wickham, age 51, of Waucoma, Iowa, pled responsible on July 15, 2022, to at least one depend of Conspiracy to Defraud the US. On January 13, 2023, Wickham was sentenced to 6 months of imprisonment and fined $3,000. Wickham should additionally serve a three-year time period of supervised launch after the jail time period. There is no such thing as a parole within the federal system.
Charlie Lynch, age 65, of Fort Atkinson, Iowa, pled responsible on July 25, 2022, to at least one depend of Conspiracy to Defraud the US. On January 13, 2023, Lynch was sentenced to 5 years of probation and fined $3,000.
Leland “Pete” Blue, age 60, of Fredericksburg, Iowa, pled responsible on July 28, 2022, to at least one depend of Conspiracy to Defraud the US. On January 13, 2023, Blue was sentenced to 5 years of probation and fined $1,000.
Tyler Thoms, age 31, of Fayette, Iowa, pled responsible on August 9, 2022, to at least one depend of Inflicting a Livestock Supplier to Hold Inaccurate Accounts and Information. On January 13, 2023, Thoms was sentenced to at least one yr of probation.
In its plea settlement, Lynch Livestock admitted that it was registered with the Secretary of the US Division of Agriculture (“USDA”) as a vendor underneath the Packers and Stockyards Act of 1921 (“the Act”). Lynch Livestock operated shopping for stations within the Northern District of Iowa and elsewhere. Lynch Livestock purchased swine from livestock producers and sellers at these stations, and the costs Lynch Livestock paid was based mostly on the numbers, classifications, and weights of the swine.
Starting in concerning the early 2000s, and persevering with by no less than late March 2017, Lynch Livestock’s second-ranking official directed different managers and staff to falsely cut back and downgrade the numbers, high quality classifications, and weights of swine that producers and sellers had delivered to Lynch Livestock’s shopping for stations all through the Midwest, together with however not restricted to stations within the Northern District of Iowa. These practices largely involved massive, company swine producers who introduced their swine on the market to Lynch Livestock. To effectuate the fraud, managers at Lynch Livestock’s headquarters created false and fraudulent scale tickets bearing the initials of the managers on the shopping for stations. By falsifying the producers’ accounts of buy, Lynch Livestock and its managers created false and fraudulent invoices to pay lower than what was due and owing to these producers. Lynch Livestock managers and staff then routinely shredded and burned proof of the fraud and doc destruction was a routine apply of the corporate and a particular response when it was anticipated that USDA officers have been investigating the corporate’s practices.
In late 2017, Lynch Livestock and the USDA entered an administrative consent resolution underneath the Act through which Lynch Livestock agreed to pay practically $800,000 in restitution to 2 of its company clients on account of fraud dedicated at two Iowa shopping for stations. In its plea settlement, Lynch Livestock agreed the quantity of loss from the fraudulent conduct previous to 2018 was higher and never remoted to the 2 company clients or two shopping for stations.
Between about 2018 and March 2021, Lynch Livestock’s managers and staff used a crowbar or different comparable object to control the scales on which livestock producers’ swine was weighed at its shopping for stations. Consequently, Lynch Livestock created, saved, and offered to livestock producers scale tickets that contained false data as a result of they understated the precise weight of the swine. Consequently, Lynch Livestock paid livestock producers lower than what was owed and violated the 2017 consent resolution with the USDA. In 2021, Lynch Livestock and the USDA entered a second administrative consent resolution. Lynch Livestock agreed to pay over $400,000 in restitution to varied farmers and producers.
Proof at varied hearings within the circumstances established that Wickham reported on to the second-ranking official and took part within the fraud for over fifteen years. Wickham additionally had a management function within the conspiracy, directing different staff to stamp fraudulent scale tickets and to control the sorting of swine to decrease the values for producers. Charlie Lynch was concerned in sow procurement and advertising for Lynch Livestock and, from no later than 2013 till about 2017, diminished classifications on sows that producers bought to Lynch Livestock. Blue managed Lynch Livestock’s sow stock and, no later than 2012, joined the scheme. Thoms initially labored as a bookkeeper in Lynch Livestock’s headquarters constructing with Wickham, Lynch, and Blue after which, from about 2018 to early 2021, managed Lynch Livestock’s shopping for station at Waucoma, Iowa. Whereas working within the headquarters constructing as a bookkeeper, Thoms participated in forging scale tickets after which, as a supervisor, used a crowbar to elevate up on a scale to cheat producers.
The defendants have been sentenced in Cedar Rapids by United States District Courtroom Choose C.J. Williams. Wickham was launched on the bond beforehand set and is to give up to the Bureau of Prisons on a date but to be set. In the course of the varied sentencing hearings, Choose Williams referred to Lynch Livestock’s fraud scheme as “a scientific technique of dishonest and stealing” from livestock producers and sellers and famous “the character of the fraud [was] to tear off folks little by little, daily.” Lynch Livestock cooperated with the federal government’s prison investigation and has agreed to varied compliance measures as part of its plea settlement.
In its plea settlement, Lynch Livestock agreed to pay over $3 million in restitution with credit score for about $1.2 million that Lynch Livestock has already paid due to the 2017 and 2021 USDA consent choices. With respect to the $1.8 million in new restitution that can be out there for livestock producers and sellers, Choose Williams indicated additional proceedings can be scheduled to allocate the restitution amongst Lynch Livestock’s victims.
United States Legal professional Timothy Duax acknowledged, “Lynch Livestock and its managers defrauded livestock producers all through the Midwest for practically twenty years. These prosecutions assist restore the victims by requiring Lynch Livestock to pay 3 million {dollars} in restitution and clarify that our workplace is dedicated to rooting out agriculture fraud on this state.”
The case was prosecuted by Assistant United States Attorneys Timothy L. Vavricek and Matthew J. Cole and investigated by the US Division of Agriculture, Workplace of Inspector Common, and the Federal Bureau of Investigation.
Courtroom file data at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are 21-CR-2074 (Wickham and Lynch), 21-CR-2042 (Blue), 22-CR-2043 (Lynch Household Firms, Inc.), and 22-CR-2044 (Thoms).
Observe us on Twitter @USAO_NDIA.